Friday, September 26, 2008

Oh dear ...

From P.J. O'Rourke's Eat The Rich ... he's investigating Wall Street.

The professionals in the world of money seem to make so much of that money themselves. How do they justify the size of the paychecks ?

"I don't," said the $2 billion money manager.
"I can't defend it," said David the floor broker.
"They shouldn't be making it," said the specialist.

We ordinary toilers at the cubicle farm. Why don't we rise up ?Why don't we get rid of the capitalist system and replace it with something that's nicer and more predictable, and gives everybody an even break ?

"What," I asked all the Wall Street people I interviewed, "does the investment industry give to society ?"

But this time they had an answer.

"Liquidity," said the $2 billion money manager.
"Liquidity," said the investment banker.
"Liquidity," said the other investment banker who'd told me things could move stupidly.
"Liquidity," said the Irish specialist broker.
"It provides liquidity," said David.

Liquidity is the Wall Street word for having things you can do with your money and being able to do them. Liquidity is the essence of the free market. Men with more time to explain themselves might have said something like "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these re Life, Liberty and Ka-ching ! Ka-ching ! Ka-ching !"

Now of course liquidity hasn't vanished. You can still use money to buy things. But some things that were liquid a while back don't seem to be any more. And a good thing too.

1 comment:

Anonymous said...

Unfortunately liquidity is what large British engineering companies use to multi-year start projects before the customer can pay for them. Withour it the work cannot start and the jobs are lost. Starting with my job.